Key Takeaways:
- It's not impossible to gain extra income from your crypto investment. There are many ways to earn interest on your cryptocurrency portfolio.
- The most popular way to earn interest on crypto is by doing staking.
If you are a cryptocurrency investor, consider producing income from your digital assets. Earn interest with cryptocurrency will give you passive income that will grow in value as the cryptocurrency markets rise. This post will teach you how to earn interest on your crypto holdings straight immediately.
Staking
Staking is a popular way to earn interest on crypto holdings and also helps support the security of crypto blockchains that rely on a proof-of-stake (PoS) consensus mechanism, such as Ethereum (ETH), Cardano (ADA), Solana (SOL), and Polkadot (DOT).
Staked coins are locked up and pledged to the cryptocurrency protocol. In return, entities staking crypto are allowed to become validators and set up what’s known as a validation node.
The protocol then chooses validators to confirm blocks of transactions from among the eligible nodes. Each time a new block of transactions is verified and added to the blockchain, a small number of new cryptocurrency coins are created and distributed to that block’s validator as a reward.
“Once you stake crypto, your node will be used to validate transactions and get paid to validate them,” says Josh Emison, CEO and co-founder of Sansbank. “The more crypto staked, the more transactions you are allotted to validate, and the more you are paid.”
You can stake your cryptocurrency in the most popular crypto exchanges such as Binance, Kucoin, and Huobi; or opt-in for a more decentralized solution by setting up your own nodes and connecting on-chain directly.
Lending
In addition to staking, crypto investors can earn interest via crypto lending.
To lend crypto, investors need to find a cryptocurrency exchange or decentralized finance (DeFi) app that offers a crypto interest account, which is similar to traditional savings accounts offered by banks.
Liquidity Farming
The name might be quite arduous to understand but in a simple term it is a mechanism where you earn interest while providing your coins to DeFi exchanges.
An exchange pair such as BNB/USDT allows user to trade their BNB for USDT and vice versa. Thus, requiring DeFi exchange to always have BNB and USDT supplies to make sure buyer-seller can always trade anytime. Thus, the platform rewards the liquidity provider by giving them interest.
Option Vaults
The least well known one to the majority of crypto holder. It can potentially have the highest yields compared to the three methods mentioned before. The mechanism is derived from options trading, where you can choose to buy low or sell high your coin.
We are offering Option Vaults products which can yield up to 100% APR, you can visit Mobee website if you wish to know more about Option Vaults.
Earning interest in crypto can be an attractive option for long-term cryptocurrency investors. Do not hesitate to consult with us to see which methods are best for you as we understand more about your investing goal and risk tolerance.
